Child Psychiatrist

Despite some easy yearly comps, rail traffic isn't showing improvement. Intermodal traffic is down 6.4% from poor numbers in 2008 - and down 32% from 2007.

Ouch. I guess that's what an L looks like.

Former CBO director Douglas Holtz-Eakin says the U.S. is headed toward a deficit iceberg. Obama's lukewarm reception in China may be a sign foreigners are interpreting the suicidal rush to increase healthcare spending as "a dramatic statement to financial markets that the federal government does not understand that it must get its fiscal house in order."

As a doctor, I will bet 100% of safety-deposited Eagles, Krugerrands, and 90% silver that these bills will be a disaster for access, quality, and cost.

Stephen Schork: More Upside in Oil

I remember when Steve was pounding the drum of disaster in February with oil in the low 30s, saying that we would see 20s etc., and that turned out to be the right time to buy. Now, I'm thinking it may be time to sell.

S&P 500 Forming New Trading Range Above 200 DMA

Let's give credit where credit is due. Mebane Faber's Tactical Asset Allocation paper shows nicely that 100% equity allocation above the 200 dma, and 100% cash allocation below the 200 dma soundly whoops buy and hold. If only I had read that paper in January of 2008 when the averages first fell below....

Crude Oil Outlook: Our Short Term Bullish Stance

Stephen:

Were you not stating in late February that WTIC was going to 20? I am not criticizing you for being wrong, but I am concerned that you may be pumping your own positions. Could you please clarify?

Yield on the 10-year note jumps to 3.7%, which suggests 30-year mortgage rates are headed back to the 5.6% area. Or is that 6.5%? Today? Ever been to a public pool when someone notices something floating in the water that shouldn't be?

The rise in yields in actually beautiful to behold because it shows that the Treasury market is functioning rationally. Specifically, there has been a massive increase in debt supply and a moderate decrease in demand, due to the pseudo-stabilization of equity and corporate debt markets. So prices go down and yields go up. Did anyone really think that we would stay with 10-year yields under 300 basis points? That seemed impossible since the moment in late March when the Fed made its purchase of Treasuries, yields dropped 50 basis points in a day, and then less than a month later, yields were back up because nobody cared. That's right, nobody cared, or perhaps, nobody was scared. Thankfully, the Bond Vigilantes are back, which means the country MAY be on the road to recovery through less debt and fewer social programs like Medicare and national health insurance that have no clear link to economic growth.

How the Gold Game Could End

First, it was 1933. Second, only fools and "patriots" actually obeyed, which is part of the reason why one can still purchase many pre-1933 gold coins at a modest premium above spot. Third, not a single person was ever actually jailed under the absurd and unconstitutional law.

On Apr 20 08:39 PM wg wrote:

> See comment below.
>
> Where you been, man? What do you think FDR did in 1932? He made it
> a federal crime for U.S. citizens to own, hold, or trade gold, and
> decreed by an overnight Presidential Order that it immediately had
> to be turned in for paper dollars--and at a low rent rate, too. Good
> lord, where you been?
>
>
> "If I was going to invest in gold it would be coins - something that
> couldn't be taken away by the government at a whim by an adminstration
> that values polar bears over it's citizens lives and livelyhoods."

Obamanomics: In beginning to articulate his long-term approach and its ideological underpinnings, the president is putting an early stamp on what promises to be a debate of historic importance. "We cannot rebuild this economy on the same pile of sand."

Reading this, I think it is time to go long TLT Jan 11 puts. If only there were a non-leveraged form of TBT .... Just as zero coupons bonds were the buy of a lifetime in 1981 around the time that the air traffic controllers were fired and taxes were first cut, so the trade goes in reverse. I just wish I was coming into maturity 30 years ago when we learning the lessons (that government rarely does anything of value) that we will relearning in perhaps ... 30 years.

Stephen Roach on False Recoveries

From a trading perspective, I'm not too upset about a world in which the government is trying--desperately--to inflate a new debt bubble to prevent us from paying the piper for 30 years of excessive debt creation. The effort will ultimately fail, and prepared investors/traders can be ready. BUT we don't just trade, we also live in this country and this world, and ultimately, the folly and crime that is currently being propagated--i.e., treating debt with more debt--will lead to to such remarkable wealth destruction that it will negatiively affect all of us in the US and in the world, regardless of whether you are 100% long in cash, gold, oil, or bullets.

The Worst Isn't Over Yet

We like Macro Man as Macro Man is one the few bloggers on these paged to ever admit that not every trade is a ten-bagger. Preservation of capital remains the key. Although one must never get married to an idea in the short term, I think he misses Macro Man's wit.

Financial Sector 50-Day Moving Average Rising

Interestingly, the green flash turns about to have been a 100% accurate sell signal since July of 2007 ....

Mark to Market: Time of Death 8:45AM, April 2, 2009

Does anyone remember when there used to be this thing called the efficient market hypothesis? There were these guys who said that all information that was publicly available (in the weakest form of the hypothesis; the strong form considered all information) translated into asset price immediately. I always thought it was not completely correct but might be helpful sometimes. Now, I guess we know that it is completely wrong--after all, we can increase economic profits with accounting. This is great. I wonder if FASB can come up with any more changes by the end of the quarter.

More Evidence That the Market Low Is Behind Us

I like the analytical approach of the article, as I am a big believer in reversion to the mean, but the central flaw is contained in the following phrase: "Looking at the data from 1950 to present...." What about '29 to '42 or the Depression of 1873? I suspect that if we looked at these periods, we would see something closer to what another poster mentioned in the Nikkei 1990 to 2008. What's also interesting is that according to the article, November 20, 2008 was a 200-day divergence high/low--and yet a few months later, the SP500 was lower by 10%! Beware....

Nasdaq: All Clear on the Year

Ummm, wasn't the Nasdaq also positive in early February? Yes, it is nice that there is no financials in the 'daq, but to quote Todd Harrison, as go the piggies, so goes the poke, and the piggies seem to be tiring.

Inflation or Deflation: Choose Your Poison

Cetin: Please try to see the other side of your trade. You may be right, and you may not be. Such confidence (overconfidence?) since time in memoriam) has been a way to lose lots of money and fast.


On Mar 26 03:28 AM Cetin Hakimoglu wrote:

> Or how about neither? We're still in a Goldilocks economy which began
> in the early 80's or low inflation and no deflation. Go long.